In a move aimed at improving quality and service, Saudi Arabia will privatize all of its airports by the end of this year.
The goal "is to improve the level of services provided to passengers, and to convert the targeted sectors into a profitable center to cover costs and to be a source of income for the owner," Abdul Hakim Al-Tamimi, head of the General Authority for Civil Aviation, said this week, according to Arab News.
First, control of the airports will be transferred to companies owned by the Saudi Civil Aviation Holding Co. Then they will be transferred to the holding company of the kingdom's Public Investment Fund.
At the end of July, Reuters revealed that the kingdom had hired the services of Goldman Sachs to manage the sale of a stake in Riyadh's King Khalid International Airport. This marked Saudi Arabia's first major privatization of an airport.
"These airports, after being transferred to companies, will be re-arranged to operate on a commercial basis and become more efficient practically and financially before they are privatized," Faisal Al-Suqair, chairman of the Saudi Civil Aviation Holding Co, said.
The decision comes as Saudi Arabia implements significant reforms and changes throughout the kingdom under Crown Prince Mohammed bin Salman's national transformation plan, part of Vision 2030.
With the sharp decline in oil prices over the past few years, the kingdom has been pushed to make major financial reforms. As a result, Saudi leaders have been looking to privatize government-controlled entities.
Even Saudi Aramco – the massive state-owned oil company dubbed "the world's most valuable company" – will be partially privatized. Prince Mohammed has said a 5 percent stake in the company will be publicly traded, estimating that this sale will rake in billions.